Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own rather, it relies on independent sales agents to market its products. These agents are paid a sales commission of 15% for all items sold Barbara Cheney, Pittman's controller, just prepared the company's budgeted income statement for next year as follows: Sales Pittman Company Budgeted Income Statement For the Year Ended December 31 Manufacturing expenses: Variable Fixed overhead Gross margin $ 24,000,000 $10,500,000 3,360,000 14,160,000 9,840,000 Check my wor Selling and administrative expenses: Connissions to agents 3,600,000 Fixed marketing expenses Fixed administrative expenses 168,000 2,120,000 5,888,000 Net operating income 3,952,000 Fixed interest expenses Income before income taxes Income taxes (30%) 840,000 3,112,000 933,600 $ 2,178,400 Net income "Primarily depreciation on storage facilities, As Rarbara handed the statement to Karl Verri Pittman's president she commented "I went ahead and used the anents 15%